Saipem Sells Onshore Drilling Business To KCA Deutag

Italian oil and gas contractor Saipem has closed the sale its onshore drilling business to KCA Deutag.

The initial announcement for the sale was made on June 1, 2022. As of today, Saipem’s activities in Saudi Arabia, Congo, United Arab Emirates, and Morocco have been transferred to KCA Deutag.

The agreement provides for the sale of the entirety of Saipem's onshore drilling operations to KCA Deutag that includes the Middle East, Africa, and the Americas for an overall cash consideration of $550 million, in addition to a 10 percent share participation in KCA Deutag.

Saipem will thus benefit from its minority shareholding in the enhanced entity. The final consideration is subject to standard pricing adjustments set out in the agreement.

Including the usual price adjustments, the consideration collected today by Saipem consists of $488 million in cash and the 10 percent participation in KCAD. Saipem will be entitled to appoint one member in the board of KCAD.

The remainder of the consideration equal to $85 million will be collected upon transfer of the activities in Americas, Kuwait, Kazakhstan, and Romania – five rigs and two active contracts – which is expected by March 31, 2023, and is subject to customary authorizations.

According to the Italian firm, this transaction for Saipem is a milestone towards a more focused and resilient business model based on the growing trends of Saipem’s reference markets, concentrating efforts in the offshore drilling business while supporting the achievement of its capital structure and liquidity objectives.

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